iPhone 3G sales hampered by Windows Mobile

Sources within Apple's retail stores report that sales of the iPhone 3G are being slowed down by handhelds running Microsoft Windows Mobile/WinCE. That's because the stores have been selling new iPhones to customers using the old EasyPay, a problematic Pocket PC handheld computer that's causing employees lots of grief.

Apple began using the EasyPay devices in its retail stores in 2005. Ever since, management has been pushing to expand the use of the handheld systems, in part to deliver more personal service in stores commonly designed without a prominent check out area, as well as to provide flexibility in handling transactions for customers without requiring them to stand in checkout lines.

An initial report by Peter Burrows in BusinessWeek detailed Apple's optimism for the devices back in 2005, explaining, "Steve Jobs believes that many people who are comfortable buying on-line — and that's a rapidly growing percentage of the total — will not only accept but will actually prefer getting their receipts electronically. Also, the wireless, paperless checkout gives Apple an opportunity to improve in-store service, as well."

In July, just prior to the iPhone 3G launch, Apple again reaffirmed confidence in its strategy to handle the heavy demand expected for the new phone by using the handheld EasyPay devices almost exclusively to complete purchases and in-store activations. The irony is that problems with the EasyPay devices' clumsy software actually aggravated problems and resulted in slower moving lines.

The rollout of the iPhone 3G required US Apple Store employees to act as AT&T representatives in collecting data from customers and setting up their mobile activations right in the store. The EasyPay devices commonly turned a five minute process into at least a fifteen minute ordeal, according to sources familiar with the devices, severely reducing the number of customers each employee could help. That in turn resulted in extremely long lines that kept some iPhone 3G customers waiting for hours to get the new phone.

'Huge old ugly pieces of junk'

It's also ironic that Apple is relying upon handheld computers with a large Windows logo on the back to sell its iPhone, a handheld computer with an Apple logo on the back. Why isn't Apple using its own technology? For starters, the iPhone project was only just beginning to come together in late 2005, after the company's retail stores had already begun a successful pilot program using the Windows Mobile devices to ring up purchases. Apple's roughly 200 retail stores likely stock fewer than 6,000 of the devices even counting replacement units, making it a costly venture to custom design a hardware solution that would replace such a small batch of commodity handheld terminals.

The Apple Stores' EasyPay units are Symbol PPT8800 Pocket PCs manufactured by Motorola and cost around $800 to $1000, although Apple probably pays significantly less than retail price for the devices. The unit itself connects to an external credit card reader, both of which have issues. "They are huge old ugly pieces of junk," one user confessed. "I hate these things. In the middle of a transaction, I'll hit 'next' and end up dumped back at the login screen. It's so frustrating."

For security reasons, the devices are configured to log out after two minutes of sitting idle. However, when they just log out spontaneously it then takes "a good two minute process to login," one user lamented. Regular hardware failures and software reinstalls remove about three units from service per month, necessitating the need to keep a lot of extra units in stock. One insider said her retail store maintains roughly twice as many EasyPay systems as are needed in regular use.

'What is it doing?'

Preparing an Apple Store in the morning requires a lengthy starting up session for the dozen or so EasyPay systems a typical retail store puts into use daily. Just turning them all on takes around fifteen minutes, even if several are done together in batches. "You have to boot it up in the morning, an eight minute process for each EasyPay that requires clicking a series of 'OK' buttons as it boots up Windows Mobile and then the EasyPay application. If you don't click the buttons right, you end up at the WinCE desktop, with no way to manually start the EasyPay app," one former Apple retail store employee reported. "You have to start all over."

The units have an integrated barcode reader for identifying products without typing in their SKU, but "the barcode scanner takes five seconds to register," complained one frustrated Apple Store employee in the busy retail flagship in downtown San Francisco. Once the purchased items are all entered, clicking on "tender" to add tax "takes forever," another user familiar with the devices noted. "What is it doing? It's just calculating the tax."

In comparison, "Apple's own POS [point of sale] application on Mac OS X flies," according to a retail employee who has used both. Apple's retail stores typically have a small number of stationary MacBook Pros to complete sales for users, but managers encourage employees to seek out customers who are waiting to make a purchase and help them with the handheld EasyPay systems.

"I don't know why they don't create an iPhone application for handling transactions," one Apple store employee said. "The camera could act as a barcode reader, and Apple should be able to figure out how to build a USB interface for the credit card reader. It looks bad to be using these old clumsy things. Plus they're PCs, and we advertise the whole Mac PC switcher thing."

I'm sure Apple will eventually replace them, but right now with so much work to do on iPhone that will benefit so many customers, I guess writing a custom bit of software for the retail stores isn't high on the list of priorities.

So a few Apple Store employees being unhappy about using a Windows product, yes? It's Apple's fault for not being more proactive and engineering a rock-solid solution based on OSX that would be a real first for retail. Instead, they play it safe by sticking with an "off the shelf" POS. Where's Steve's anger and bile now?

So a few Apple Store employees being unhappy about using a Windows product, yes? It's Apple's fault for not being more proactive and engineering a rock-solid solution based on OSX that would be a real first for retail. Instead, they play it safe by sticking with an "off the shelf" POS. Where's Steve's anger and bile now?

I concur. Apple should make their own software or adapt USB CC reader (as stated) for the iPod Touch. but I don't see this being a priority with only a few thousand needed. It sounds like it would be financially prohibitive.

Since Apple doesn't make a single PoS system I don't see much irony here or that it's a big deal. The system issues seem to be more a problem with Symbol's software, not with MS. Doesn't Apple use a non-Apple solution for their iTunes servers?

My experience with Apple employees using these Symbol devices over the last few years has been great. No issues at all.

The fact that they can't run the program after windows boots, shows that they are not running off windows. POS programs are unique, and don't typically run off another OS's GUI. ie IBM 4690 et al.

But doesn't Symbol make that device? The screen I saw sure looked like it was running under a mobile Windows OS. It is sold as a Windows device, I don't understand why someone would develop an alternate OS for it rather than develop on the device's intended OS.

I concur. Apple should make their own software or adapt USB CC reader (as stated) for the iPod Touch. but I don't see this being a priority with only a few thousand needed. It sounds like it would be financially prohibitive.

Since Apple doesn't make a single PoS system I don't see much irony here or that it's a big deal. The system issues seem to be more a problem with Symbol's software, not with MS. Doesn't Apple use a non-Apple solution for their iTunes servers?

I don't know. Rumors are that the back end of each retail store is on a Windows server. I don't know if that's true, but if there aren't OS X programs to handle a niche need for that, then they need to use what's available or pay a lot to develop one for just a couple hundred stores, their developers are better used to work on paying products.

But if they partner with a company, to make a docking card reader, I don't see why it wouldn't be worth doing. That way, the reader and program can be marketed to other companies.

I personally hadn't seen any problems with the devices when I paid (or got a refund) through those devices.

My experience with Apple employees using these Symbol devices over the last few years has been great. No issues at all.

Buying an iPhone 3G accessory in the UK Regent Street store, was pretty smooth and good for me. I could buy it on the spot, the guy was pleasant and efficient, and I don't have to carry around more stupid pieces of paper from who knows what poor trees.

That said, I hope Apple continues to improve its wireless POS systems.

What perhaps many people don't realise is that the problem with iPhone 3G sales is not likely to be the wireless POS system. It is probably all the idiotic carrier activation, credit checks and contracts.

I've said it before, the problem is not that Apple has to use non-Apple stuff. It is that they have to rapidly roll out all sorts of procedures that are hampered by the poor quality, poor maintenance, and poor response of all the complicated mobile network systems just to get a signal.

I can name numerous examples, as many others can.

Carphone Warehouse in the UK - poor service, poor Apple knowledge, very limited stock. I have personally entered several transactions through their POS system, which is integrated with carrier activation and credit checks. Let's just say their POS really is a Piece Of Sh*t. More seriously, it is some sort of terminal that logs into some sort of remote mainframe-esque server. We're talking very old school here.

O2 in the UK - Apple Retail Stores in the UK had to install VMWare, just to use IE to access the O2 website. Again, personal observation shows that there were two separate systems, for example "O2 URU" or something like that and then O2 credit check, activations, etc.

Celcom in Malaysia - Hard to find stores, lack of stock such as prepaid SIMs, staff suggesting certain mobile broadband solutions with Mac drivers that were made pre-Leopard launch (and didn't work when I tried it with my MacBook).

I wonder how different AT&T could be compared to all the above.

That said I hope Maxis in Malaysia will carry the iPhone 3G. It is overall a better quality service providers, on an international scale.